Most B2B Brands are adopting sophisticated Account Based Marketing (ABM) programs that apply digital, targeting, and personalized marketing practices to improve sales productivity and key account development. These strategies blend advanced analytics, with marketing content, and high degrees of sales and marketing integration to accelerate enterprise selling and redefine the customer journey.
Marketers are investing a lot of money in ABM. ITSMA research suggest B2B CMOs are spending over quarter (28%) of their marketing budgets on Account Based Marketing programs. The Duke CMO Survey reports marketers are now investing more money in Customer Relationship Management than they are in Branding.
Investing in ABM makes sense. Enabled by advanced analytics, these strategies promise to more fully leverage technology and data, better connect marketing effort to key account sales, and more seamlessly integrate marketing and sales processes. “I define ABM as the new name for the age-old practice of intensely studying the customer and applying that meaningful insight to the development of masterfully choreographed sales and marketing plans,“ reports Melinda McLaughlin, the CMO of Extreme Reach who just took ownership of her company’s ABM strategy. “What is entirely new and exciting, however, is that our toolkit for activation of those plans is exponentially more diverse. Then, because many of these new tactics are digital, our actions return data that help the team better understand what is working and what isn’t so we can adapt, swerve, and/or pivot in near real time.”
Even though ABM focuses on key account selling, it’s generally owned by the CMO. This is because marketing controls most of the growth assets that make these programs run – notably the martech stack, demand generation programs, the customer interaction data they both produce, and the marketing content that fuels them. But these assets alone won’t ensure success. CMOs need to be very smart about how they execute because ABM programs have many moving parts and face the same headwinds as every other sales and marketing collaboration in history.
“The end state vision where data and technology enable one sales and marketing motion looks really good on paper” reports Jaime Punishill, the CMO of Lionbridge who just assumed command of his company’s ABM program. “But when you get into the details of enabling ABM, most CMOs are in need of a GPS to help guide them through some pretty significant points of failure, scale and leverage. For example, if sales and marketing want to work together on a common customer journey they will need to define and agree on common objectives, processes, incentives and shared accountability. The way B2B firms have historically measured marketing funnel vs. sales pipeline and leads will have to evolve dramatically to support a seamless customer journey and the complexities of engaging many stakeholders using many touchpoints across a large number of accounts.”
CMOs should focus on four keys to success to ensure their ABM strategies generate results in terms of firm value and financial performance:
- Make scalability the core strategic objective of ABM technology investment;
2. Evolve performance measurement from marketing sourced pipeline to customer engagement metrics;
3. Improve how fast and efficiently your organization shares customer data and insights;
4. Establish a common economic purpose for long-term investment in ABM assets with sales and finance.
Focus on Scalability – Scalability is a critical goal of ABM because high quality account relationship management is very resource intensive.ITSMA Benchmarks suggest that it costs $36,000 per account to deliver highly personalized 1:1 service to an account because it involves high value human interaction. Those unit economics won’t scale across hundreds or thousands of accounts unless technology dramatically changes the cost structure of targeting, servicing, and developing accounts. “For ABM investment to really pay off it needs to scale. We’ve won awards from ITSMA for the “white glove ABM” we were able to provide our clients when we concentrated our human sales efforts on a few of our largest customers. With our pivot to the broader enterprise market, the challenge is to use technology, process and personalization to deliver that level of personalized service to thousands of stakeholders in thousands of accounts,” reportsMike Marcellin, CMO of Juniper Networks. “I started investing in ABM a few years ahead of the curve because I saw it as fundamental to our growing focus on enterprise and solutions marketing – where our future growth is going to come from. We had to change from our traditional focus on selling equipment to a few select carriers to selling to many, many more enterprise accounts, with thousands of stakeholders and long tail (subscription) relationships. To become more scalable, we have done many things: building a data science team to increase our focus on advanced analytics needed to build a customer data repository to support ABM at scale, ensuring we have a state-of-the-art martech stack, and massively ramping up our demand generation efforts.
Make customer engagement the measure of success. Many B2B CMOs believe that the traditional measures of sales and marketing effectiveness based on the demand unit waterfall model – Marketing sourced pipeline, Marketing Qualified leads, Sales Qualified Leads – are flawed. These metrics lead to constant challenges from sales and finance. They waste precious energy on documenting who gets credit instead of improving account profitability. They also make it difficult to reconcile interactions with many individual stakeholders into a coherent picture of account potential, profitability, penetration and customer lifetime value. Robin Matlock, the CMO of VMware suggests the unit of measurement for ABM needs to evolve from traditional marketing sourced pipeline and MQLs to customer engagement and account health. At the Forbes CMO Summit, Matlock shared her experience evolving how ABM was measured. “Getting insights on an account level vs. an individual level was a huge paradigm shift. Thinking about Coca Cola as a holistic account as opposed to ‘I have a lead and I’m tracking this one individual through a buying journey’ when the buying journey is made up of tens of individual and an account is made up of many leads – Getting the mentality that I want to look at the health of an account. I want to look at the pulse of what is going on in the account. I want to look at trends and how they are engaging with our marketing activity. The solution is quality of the engagement of the customer. Measuring this at scale is the trick. With many stakeholders in the account tracking interactions across marketing and sales systems is the golden thread.
Ravi Viswanathan, CMO, Tata Consultancy Services, who is in the second year of his ABM execution echoes this perspective “Our ABM initiative is focused around customer centricity – the celebration of our customer’s growth & transformation journey, the success we have jointly achieved and the amplification of the amazing work that our customers are doing in their respective organizations on the wider Business 4.0™ canvass. The focus on driving the AAA – Awareness, Articulation & Amplification strategy – with the customer at the center of it, and leveraging the myriad investments TCS has made around the enterprise ecosystems is providing higher levels of customer relationships and constantly enhancing the brand reputation of TCS as a thought leader.”
Accelerate the sharing of data and customer insights. Modern marketing produces customer data that allows marketers to identify trigger events that signal buying intent, flag inquiries from important influencers within accounts, and make decisions about next best actions based on past customer behavior. However, the window of time your organization has to act on that data is small – gated by customer time, attention and expectations for response. This makes speeding data and decisions about an opportunity from the source (e.g. a web site, an algorithm in marketing) to a customer facing employee who can act on it (e.g. a relationship manager or customer service rep) a critical value driver. Academic research by the Marketing Science Institute (MSI) has proven the ability of an organization to generate, disseminate and respond to market intelligence – called Organizational Knowledge Sharing – has a quantifiable positive effect on firm value and financial performance in terms of profits, sales, and market share.
Establish a common economic purpose for investing in ABM assets. According to Jaime Punishill, “Sales and Marketing have historically been separate functions with separate goals and KPIs. But seen through the eyes of the customer there is only one customer journey and one aggregated setoff interactions they have with a firm. For ABM to work, marketing and sales will need a common economic purpose and financial incentive if they are going to collaborate around a common customer journey.” Agreeing on a common financial goal to support the execution of ABM strategies is critical but can be tricky. ABM programs require more capital investment than conventional marketing campaigns. So CMOs must build a multiyear investment roadmap to support building out the analytics infrastructure, technology, content, and owned marketing channels required to support ABM, while at the same time balancing short-term demand generation tactics to drive sales. The most financially valid business cases will treat ABM as a “force multiplier” that dramatically improves the utilization of these growth assets by taking significant human labor sales preparation, content personalization, and marketing program execution. Maximizing the return on growth assets can unlock significant firm value growth assets like salespeople, data and content are severely and persistently under-utilized. For example: Sales reps still spend most of their time not talking to customers, data is not fully leveraged, Marketing content is not utilized, and most CMOs don’t believe technology is replacing their marketing staff any time soon.
To further educate business leaders on ways to capitalize on the full potential of advanced analytics to drive growth, , the faculty of the Revenue Enablement Institute is leading a research initiative to better understand and address these key points of leverage and success.
We invite transformation minded CXO’s, CMOS, CSOs and CEOs to participate in our first Annual CXO Survey and apply what we learn to build higher performing revenue teams. All study participants will receive the full findings of the study and a briefing on the key implications to their business and revenue plan.
We will be presenting the findings at the Revenue Enablement Forum later this year.